Leucadia National ( LUK) announced Thursday it offered to buy the 53% of WilTel Communications ( WTEL) it doesn't already own. The news sent the telecom outfit's stock surging 37% and signaled that Leucadia, the media-shy vulture firm with alliances with Warren Buffett, has great confidence in WilTel's prospects.

Under terms of the proposal, WilTel shareholders would receive 0.3565 Leucadia shares for each WilTel share -- a stock-swap deal that represents a 30% premium on WilTel's shares, according to Leucadia's news release. Shares of the battered telecom outfit were halted after soaring 37% to $14.51. Leucadia's stock eased 2.4% to $37.74. Based on Wednesday's closing price, Leucadia's offer has a per-share value of $13.78.

WilTel confirmed the offer was made, but declined to comment.

The move by Leucadia -- something of a miniature but similarly successful version of Buffett's Berkshire Hathaway ( BRK.A) -- marks the latest significant move by a deep-value bargain hunter into the badly bruised telecom arena. In July 2002, Leucadia made a $330 million investment in WilTel, then Williams Communications, to help the company emerge from bankruptcy proceedings. Around that time, Berkshire made an investment in Level 3 Communications ( LVLT) convertible notes.

Leucadia isn't the only new WilTel fan, either: In Berkshire's 13F quarterly disclosure to the Securities and Exchange Commission released Wednesday, Buffett's firm disclosed that it had purchased 1.5 million shares in WilTel.

Berkshire and Leucadia are joint-venture partners in Berkadia, which in March made a bid for bankrupt Conseco's mobile-home financing unit that was rejected by the bankruptcy judge. Berkadia also owns half of Finova, acquiring the stake in 2001 in exchange for a $6 billion loan to the then-bankrupt lender.

Why WilTel?

Why would Leucadia and Buffett be interested in a down-on-its-luck telco outfit like WilTel? Well, its multidecade "master services agreement" with SBC Communications ( SBC), for starters -- a 20-year contract that was imperiled but emerged intact through the bankruptcy proceedings. WilTel also has a nationwide broadband network -- the one it spent roughly $8 billion to build, which helped push it into bankruptcy.

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